Exam 39: Agriculture: Problems, Policies, and Unintended Effects

Suppose farmers agree to reduce their supply of foodstuffs.The most likely reason they would want to do this is they believe that less supply

Exhibit 39-4 -Refer to Exhibit 39-4.If the government sets a target price at $5 per bushel,consumers will end up paying __________ for the quantity of wheat they purchase.

As a result of an agricultural price support,

Under the target price system,

Exhibit 39-4 -Refer to Exhibit 39-4.At the competitive equilibrium price and quantity,the total revenue of wheat farmers will be

In 1930,agriculture accounted for 10 percent of the U.S.GDP; in 2000,it accounted for only 5 percent of the GDP.

The productivity of the agriculture sector (of the economy)increases dramatically.A likely consequence is:

Rising demand for an agricultural good __________ the payments government is committed to pay farmers under a __________ program.

The demand for farm goods is income inelastic if the percentage change in quantity demanded is __________ the percentage change in __________.

If the demand curve for agricultural products is inelastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

Why is bad weather sometimes good news for farmers?

Increased productivity in the agricultural sector during much of the twentieth century shifted the

Under a target price system,the government can adjust the deficiency payment paid to a farmer by deciding to pay some percentage of the difference between the target price and the market price.

Exhibit 39-6 -Refer to Exhibit 39-6.A major change in weather conditions favorable to the production of X will shift the supply curve for X from its original position.The consequent change in price and total revenue would be less sharp if the demand curve for X is __________ because it is __________ over the relevant region.

Assuming the demand for their products is inelastic,farmers (as a group)have an incentive to

A government agricultural policy that sets a limit on the quantity of a product that a farmer is allowed to bring to market is the

A potato farmer who signs a futures contract is

Exhibit 39-4 -Refer to Exhibit 39-4.At a target price of $4 per bushel,how many bushels of wheat are produced?

A government agricultural policy that restricts output by limiting the number of farm acres that can be used to produce a particular crop is the

Under the target price program,